COVID-19 outbreak has brought the world to a standstill. A number of jobs have lost, industries and businesses have collapsed, schools have closed off and people are losing their loved ones every day. While efforts are being made to revive the economy and bring back the order, it is difficult at the moment as people fear for their lives and prefer to hold back till the vaccine of the virus comes out.
The government of India has amended the Corporate Social Responsibility (CSR) rules in Schedule VII of the Companies Act, 2014 with a view to helping boost funding for developing new vaccines, drugs and medical devices related to the coronavirus pandemic. This is highly beneficial at the time as the country needs to find an affordable and quick solution to control the pandemic.
The latest amendments also allow companies engaged in research and development (R&D) activity of new vaccine, drugs and medical devices in their normal course of business, to undertake R&D activity of new vaccine, drugs, and medical devices related to COVID-19 under the CSR ambit.
One of the conditions is that such R&D activities should be “carried out in collaboration with any of the institutes or organisations” in item nine of Schedule VII, as per the second notification. Details of such activity should be disclosed separately in the annual report on CSR included in the board’s report.
The government has specified that these amendments will be valid for three financial years – 2020-21, 2021-22, and 2022-23 – subject to certain conditions.
According to the amendment, ‘contributions to incubators or R&D projects in the field of science, technology, engineering and medicine, funded by the central or state governments or public sector undertaking or any agency of the central or state government would be considered as CSR.’
In addition to this, the notification has also stated that ‘contributions to public-funded universities, Indian Institutes of Technology (IITs), national laboratories and autonomous bodies established under the Department of Atomic Energy (DAE), Department of Biotechnology (DBT), Department of Science and Technology (DST) and Department of Pharmaceuticals would also come under the CSR ambit’.